GE Money Bank: The M-Budget Card Initiative SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of GE Money Bank: The M-Budget Card Initiative
The M-Budget Card case study is about mastering the challenges of an exploratory strategic initiative in a context marked by time pressure and frequent change. M-Budget was the first of a series of highly successful projects that established GE Money Bank as a leader in the Swiss credit card market. The business concept was to cooperate with the country's leading retailer MIGROS to develop an innovative credit card offering, the M-Budget card. The M-Budget card was launched a mere six months later and was an immediate success. The demand for the card exceeded expectations by far and the bank was inundated by more than 100,000 applications in the first weeks. The road to the successful market launch, however, was a rocky one and the team around Pierre had to master numerous challenges. Pierre, who took the lead in the initiative, had to select the right people to compose a team that had all the expertise and knowledge required to develop an entirely new market offering. A competitive move by the second largest retailer COOP forced the team to change its initial value proposition while working under intensive time pressure. Finally, the team had to overcome a series of operational problems after the initial market launch. The case study retraces the initiative's development over time and describes the leadership and organizational challenges faced by the team on its way to the successful creation of an entirely new business segment.
Authors :: Michael L. Tushman, Sebastian Raisch, Christian Welling
Swot Analysis of "GE Money Bank: The M-Budget Card Initiative" written by Michael L. Tushman, Sebastian Raisch, Christian Welling includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Card Budget facing as an external strategic factors. Some of the topics covered in GE Money Bank: The M-Budget Card Initiative case study are - Strategic Management Strategies, Collaboration, Entrepreneurship, Innovation, Knowledge management, Leadership, Organizational structure, Strategy execution and Organizational Development.
Some of the macro environment factors that can be used to understand the GE Money Bank: The M-Budget Card Initiative casestudy better are - – supply chains are disrupted by pandemic , geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing household debt because of falling income levels,
digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, etc
Introduction to SWOT Analysis of GE Money Bank: The M-Budget Card Initiative
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GE Money Bank: The M-Budget Card Initiative case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Card Budget, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Card Budget operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of GE Money Bank: The M-Budget Card Initiative can be done for the following purposes –
1. Strategic planning using facts provided in GE Money Bank: The M-Budget Card Initiative case study
2. Improving business portfolio management of Card Budget
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Card Budget
Strengths GE Money Bank: The M-Budget Card Initiative | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Card Budget in GE Money Bank: The M-Budget Card Initiative Harvard Business Review case study are -
Successful track record of launching new products
– Card Budget has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Card Budget has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Card Budget has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Card Budget to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Card Budget is one of the most innovative firm in sector. Manager in GE Money Bank: The M-Budget Card Initiative Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Card Budget are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Card Budget has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in GE Money Bank: The M-Budget Card Initiative HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Card Budget is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Michael L. Tushman, Sebastian Raisch, Christian Welling can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Card Budget digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Card Budget has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Organizational Development industry
– GE Money Bank: The M-Budget Card Initiative firm has clearly differentiated products in the market place. This has enabled Card Budget to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Card Budget to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Card Budget in the sector have low bargaining power. GE Money Bank: The M-Budget Card Initiative has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Card Budget to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Card Budget has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study GE Money Bank: The M-Budget Card Initiative - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Card Budget is one of the leading recruiters in the industry. Managers in the GE Money Bank: The M-Budget Card Initiative are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the GE Money Bank: The M-Budget Card Initiative Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses GE Money Bank: The M-Budget Card Initiative | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GE Money Bank: The M-Budget Card Initiative are -
Slow decision making process
– As mentioned earlier in the report, Card Budget has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Card Budget even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Card Budget needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Card Budget has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Card Budget has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study GE Money Bank: The M-Budget Card Initiative, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Card Budget is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study GE Money Bank: The M-Budget Card Initiative can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Card Budget products
– To increase the profitability and margins on the products, Card Budget needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study GE Money Bank: The M-Budget Card Initiative that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case GE Money Bank: The M-Budget Card Initiative can leverage the sales team experience to cultivate customer relationships as Card Budget is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the GE Money Bank: The M-Budget Card Initiative HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Card Budget has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael L. Tushman, Sebastian Raisch, Christian Welling suggests that, Card Budget is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study GE Money Bank: The M-Budget Card Initiative, in the dynamic environment Card Budget has struggled to respond to the nimble upstart competition. Card Budget has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities GE Money Bank: The M-Budget Card Initiative | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study GE Money Bank: The M-Budget Card Initiative are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Card Budget can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Card Budget has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study GE Money Bank: The M-Budget Card Initiative - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Card Budget to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Card Budget can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. GE Money Bank: The M-Budget Card Initiative suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Card Budget can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Card Budget can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Card Budget can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Card Budget in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Card Budget to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Card Budget to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Card Budget is facing challenges because of the dominance of functional experts in the organization. GE Money Bank: The M-Budget Card Initiative case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Card Budget has opened avenues for new revenue streams for the organization in the industry. This can help Card Budget to build a more holistic ecosystem as suggested in the GE Money Bank: The M-Budget Card Initiative case study. Card Budget can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Card Budget can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Card Budget can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Threats GE Money Bank: The M-Budget Card Initiative External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GE Money Bank: The M-Budget Card Initiative are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Card Budget in the Organizational Development sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Card Budget is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study GE Money Bank: The M-Budget Card Initiative, Card Budget may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Card Budget business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Card Budget needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Card Budget in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Card Budget.
Consumer confidence and its impact on Card Budget demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Regulatory challenges
– Card Budget needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Card Budget will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Card Budget needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Card Budget can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Card Budget with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of GE Money Bank: The M-Budget Card Initiative Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study GE Money Bank: The M-Budget Card Initiative needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study GE Money Bank: The M-Budget Card Initiative is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study GE Money Bank: The M-Budget Card Initiative is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of GE Money Bank: The M-Budget Card Initiative is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Card Budget needs to make to build a sustainable competitive advantage.
